Chapter 12: Services & Settlements Key Issue 1: Where are services distributed?

3 Types of Services Consumer Services Business Services Public Services

Consumer Services Principal purpose is to provide services to individual consumers who desire them and can afford to pay for them. Constitutes nearly ½ of all jobs in the U.S. Subdivided into four main types of consumer services: Retail and Wholesale Services Education Services Health and Social Services Leisure and Hospitality

Business Services Principal purpose is to facilitate other businesses. Constitutes ¼ of all jobs in the U.S. Subdivided into three main types of business services: Professional Services Financial Services Transportation Services

Public Services Purpose is to provide security and protection for citizens and businesses. Constitutes about 5% of all jobs in the U.S. Workers divided among various levels of government. Federal Government State Government Local Government

Service Success Rising and Falling Service Employment Service sector of the economy has seen nearly all the growth in employment worldwide. Service sector has also been most negatively impacted by the recession. Change in Number of Employees Within business services, jobs expanded most rapidly in professional services e.g. engineering, management, and law. Within consumer services, fastest increase has been in provision of health care.

Chapter 12: Services & Settlements Key Issue 2: Where are consumer services distributed?

Central Place Theory Geographers use central place theory to help explain why consumer services follow a regular pattern based on size of settlements, with larger settlements offering not only more consumer services but also more specialized ones. Geographer Walter Christaller proposed the concept of a a central place in the 1930s. Helps explain how the most profitable location can be identified

Market Area of a Service A central place is a market center for the exchange of goods and services by people attracted from the surrounding area. It is centrally located to maximize accessibility. A market area, or hinterland, is the area surrounding a service from which customers are attracted. People obtain services from the nearest location U.S is divided into market areas based on the hinterlands of the largest urban settlements. 171 functional regions centered around commuting hubs or “daily urban systems.” To represent market areas, Hexagons are used. They represent a compromise between squares and circles

Daily Urban Systems Market Areas

Range and Threshold of a Market Area The range of a service is the maximum distance people are willing to travel to use it. People travel short distances for everyday services. e.g. groceries and McDonalds (3 Miles) People travel greater distances for services offered exclusively in specific places. e.g. concerts and professional sporting events (60 Miles) The threshold of a service is the minimum number of people needed to support the service. Service providers determine the suitability of a service center by overlaying the range of potential customers to its threshold.

Hierarchy of Consumer Services Only consumer services that have small thresholds, short ranges, and small market areas are found in small settlement. Larger settlements provide consumer services that have larger thresholds, ranges, and market areas. Developed countries have numerous small settlements with small thresholds and ranges and far fewer large settlements with large thresholds and ranges.

Nesting of Services and Settlements Central place theory states that market areas across a developed country would be shaped as a series of hexagons of various sizes, unless interrupted by physical features. Four different levels of market area exist: Hamlet (smallest) Village Town City (largest)

According to central place theory, market areas are arranged in a regular pattern. Larger market areas, based in larger settlements, are fewer in number and farther apart from each other than smaller market areas and settlements. However, larger settlements also provide goods and services with smaller market areas; consequently, larger settlements have both larger and smaller market areas drawn around them.

Minot North Dakota is surrounded by: 7 small towns with ranges of 20 miles 15 villages with ranges of 12 miles 19 hamlets with ranges of 10 miles

Rank-Size Distribution of Settlements Ranking settlements from largest to smallest in many developed countries produces a regular pattern or hierarchy. Rank-size rule states that the country’s nth-largest settlement is 1/n the population of the largest settlement. The second largest city is ½ the size of the largest Plotting populations on logarithmic paper produces a straight line. Exceptions include the presence of a primate city- a city more than twice the population of the second-ranking settlement. Creates a hardship for citizens as they have to travel further for services, relies upon public transportation

8,391,881/4=2,097,970 8,391,881/8=1,048,985

Market Area Analysis Service providers believe that the location of a business is the most important factor to its profitability. Steps to Determine Profitability of a Location Compute the Range Survey local residents about willingness to travel a specific amount of time to the potential site of a new store. Compute the Threshold Identify how many patrons are needed to meet expenses. Draw the Market Area Draw the range around potential location of new store, then identify whether or not the threshold is met within that radius.

The Gravity Model The gravity model predicts that the optimal location of a service is directly related to the number of people in the area and inversely related the distance people must travel to access it. Essentially, the best location will be the one that minimizes travel for all potential customers. Geographers follow these steps to determine best location: Identify possible site Identity where potential users live Measure the distance of service to every user Divide each potential user by the distance to the site Sum all of the results of users divided by distances Select a 2nd location Repeat steps and compare results

Chapter 12: Services & Settlements Key Issue 3: Where are business services distributed?

Hierarchy of Business Services Urban settlements provide consumer services to people but not every settlement has business services. Urban settlements tend to specialize in one or a few specific business services. Geographers identify a handful of urban settlements that play an important role in global business. These are known as Global Cities.

Business Services in Global Cities Global cities or world cities are at the top of the urban settlement hierarchy. Center of the flow of information and capital in the global economy. Location of countless large corporations’ headquarters. Global cities area divided into three levels: alpha, beta, and gamma, which, in turn, are further subdivided based on economic, political, cultural, and infrastructure factors. Examples – alpha++ (New York) and alpha+ (Chicago) Alpha++ cities are London and New York City, which are vastly more integrated with the global economy than all other cities. Alpha+ cities complement London and New York City by filling advanced service niches for the global economy. Alpha and Alpha- cities are cities that link major economic regions into the world economy. Beta level cities are cities that link moderate economic regions into the world economy. Gamma level cities are cities that link smaller economic regions into the world economy. Sufficiency level cities are cities that have a sufficient degree of services so as not to be obviously dependent on world cities.

Alpha cities are also economic powerhouses Alpha cities are also economic powerhouses. They are meccas for the international business community, and they usually house the core of their national financial industry, including stock exchanges. Many international companies have offices in every alpha city so that they can be in touch with the most current events going on around the world, and alpha cities are major waypoints for shipping as well, with the city often being situated on a port. To be an alpha city, a city must have a well serviced international airport, along with hubs for trains, shipping, and trucking, and an extensive public transit system. The community of people in the city are diverse, with people from many nations, religions, and socioeconomic classes represented. Alpha cities tend to have tremendous political influence, not only in their own nations, but in the world in general. Finally, an alpha city is a cultural center. Alpha cities are rich in arts and culture, with museums, theaters, resident symphonies, and other forms of culture. They tend to be arbiters of taste and fashion, with new trends emerging first on the streets of alpha cities, and they are also powerhouses of information exchange, media, and publishing. Every alpha city houses major international and national publishers, media outlets, and information technology companies. Many alpha cities are popular tourist destinations, thanks to the large role they play in society and culture. At any given time, tourists from all over the world can be found sharing the streets of an alpha city with business travelers, residents, and transients in the city temporarily for work, artistic performances, and other activities.

Business Services in Developing Countries Some businesses locate in developing countries, because they tend to offer supportive laws, weak regulations, and low-wage workers. Primarily there are two main types of business services offered in developing countries. Offshore Financial Services Taxes Tax breaks include little to no taxes on income, profits, and capital gains. Privacy Bank secrecy laws can help individuals and businesses evade disclosure in their home countries.

Business Services in Developing Countries Business-Processing Outsourcing Back-office functions, such as insurance claims processing, payroll management, transcription work, and other routine clerical activities, can be performed at a lower cost, if they are performed by workers in developing countries. Developing countries with a large labor force fluent in English are relatively more attractive to firms seeking a place to outsource some of their routine work.

Economic Base of Settlements A settlement’s distinctive economic structure derives from its basic industries, which export primarily to consumers outside the settlement. Nonbasic industries are enterprises whose customers live in the same community-essentially, consumer services. A community's unique collection of basic industries defines its economic base. Economic base of a postindustrial society, such as the U.S., are in business, consumer, or public services. Ex. Computing and data processing services: Boston

Chapter 12: Services & Settlements Key Issue 4: Why do services cluster in settlements?

Service Clusters Services are clustered in settlements. Rural settlements are centers for agriculture Urban settlements are centers for consumer and business services One half of the people of the world live in rural settlements, the other half live in urban settlements.

Services in Rural Settlements Rural settlements tend to take one of two forms. A clustered rural settlement is an agricultural-based community in which a number of families live in close proximity to each other, with fields surrounding the collection of houses and farm buildings. Typically include homes, barns, tool sheds, and consumer services, such as religious structures, schools, and shops. A dispersed rural settlement, typical of the North American rural landscape, is characterized by farmers living on individual farms isolated from neighbors.

CLUSTERED COLONIAL AMERICAN SETTLEMENT Newfane, Vermont, includes a courthouse and church buildings clustered around a central common.

DISPERSED RURAL SETTLEMENT Wisconsin

Services in Early Settlements Early Consumer Services Places to bury the dead Religious leaders stationed at burial sites to perform service of saying prayers for the deceased. Likely encouraged the building of more permanent structures for ceremonies and dwellings. Manufacturing centers Early Public Services Primarily tasked with offering protection to everyone in the settlement. Walls built around settlements for protection. Defenders (soldiers) Early Business Services Settlement served as a neutral ground where several groups could safely come together to trade goods and services. Officials in the settlement provided producer services. Regulating the terms of transactions Setting fair prices Keeping records Creating a currency system

Urbanization Earliest Urban Settlements Ancient Urban Settlements Prehistoric Urban Settlements Earliest urban settlements were probably in the Fertile Crescent of Southwest Asia and North Africa. Among the oldest is Ur in Mesopotamia (present-day Iraq) Ancient Urban Settlements Settlements first established in eastern Mediterranean about 2,500 B.C. Knossos (on the island of Crete) Troy (in Asia Minor- [Turkey]) Mycenae (in Greece) Urban settlements were primarily trading centers and organized into city-states- independent self-governing communities that included the settlement and nearby countryside. Athens was the largest city-state in Greece Rome was believed to have grown to a population between 250,000 and 1 million.

Earliest Urban Settlements (cont) Medieval Urban Settlements Dense network of small market towns serving the needs of particular lords covered much of Europe. Largest medieval European settlements served as power centers for the lords, church leaders, and as major market centers. Tallest and most elaborate structures were usually churches. Usually surrounded by walls.

Rapid Growth of Urban Settlements The process by which the population of urban settlements grows, known as urbanization, has two dimensions. An increase in the number of people living in urban settlements. An increase in the percentage of people living in urban settlements. Percentage of people living in the urban settlements has increased from 3% in 1800 to 6% in 1850, 14% in 1900, 30% in 1950, and 47% in 2000. Developed Countries: ¾ of population is urbanized. Developing Countries: 2/5 of population is urbanized.

URBAN SETTLEMENTS WITH AT LEAST 2 MILLION INHABITANTS Most of the world’s largest urban settlements are in developing countries, especially in East Asia, South Asia, and Latin America.